A business can justify keeping a product as long as it ...

[scienceeasy]

A business can justify keeping a product as long as it contributes to profits or enhances the effectiveness of a product mix.
 
 Indicate whether the statement is true or false

Question 2

What are reference prices and how do customers use them? What is the difference between internal and external reference prices?

[katkat_flores]

Answer to Question 1

True

Answer to Question 2

Reference pricing means pricing a product at a moderate level and positioning it next to a more expensive model or brand in the hope that a customer will use the higher price as a reference point (i.e., a comparison price). Because of the comparison, the customer is expected to view the moderate price more favorably than he or she would if the product were considered in isolation.
When interpreting and responding to prices, how do customers determine if the price is too high, too low, or about right? In general, they compare prices with internal or external reference prices. An internal reference price is a price developed in the buyer's mind through experience with the product. It reflects a belief that a product should cost approximately a certain amount. For the product categories with which we have less experience, we rely more heavily on external reference prices. An external reference price is a comparison price provided by others, such as retailers or manufacturers. Some grocery and electronics stores, for example, will show other stores' prices next to their price of a particular good if their price is lower than the competitor's price.

[scienceeasy]

Thank you

[katkat_flores]

No problemo